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The City watchdog said it had received 17 responses to its initial consultation, with some concern raised about the types of financial products that had to be recommended, how referrals would operate and the differences between the FSA and MiFID directive’s definition of independence.

The regulator said a firm’s independent status would not be affected if it referred clients for pension transfer or long term care products. It said: “Such firms can also make internal or external referrals for advice on non-retail investment products. If a firm does not provide any personal recommendations on retail investment products to a client, and refers them to another firm instead (including to a firm providing restricted advice), this will not affect its independent status.”

On European regulations, it said: “MiFID II is currently being negotiated in the European Council and parliament and it is not yet clear whether the revised directive will include a definition of independent advice.

“However, we believe that our approach to independent and restricted advice in the UK is compatible with the proposals being debated in MiFID II, and we will consider whether any action is necessary once it is known what the Directive will contain. We estimate that MiFID II will come into force no earlier than 2015.”

The regulator said multiple advisers could be involved in the advice process as long as “appropriate systems and controls are in place to ensure that all personal recommendations do indeed meet the required standard.”